EXPLANATORY STATEMENT
Federal Financial Relations ACt 2009
Federal Financial Relations (National Health Reform Payments) Determination 2013-14
The Intergovernmental Agreement on Federal Financial Relations (the IGA) provides a robust foundation for collaboration on policy development and service delivery, and facilitates the implementation of economic and social reforms in areas of national importance.
In agreeing the new framework for federal financial relations, the Commonwealth committed to the provision of financial support for the States’ service delivery efforts through:
• general purpose financial assistance, including the ongoing provision of GST payments, to be used by the States for any purpose;
• National Specific Purpose Payments (National SPPs) to be spent in key service delivery sectors; and
• National Partnership payments to support the delivery of specified outputs or projects, to facilitate reforms, or to reward those jurisdictions that deliver on nationally significant reforms.
The new federal financial framework commenced on 1 January 2009. The payment provisions of the IGA are implemented through the Federal Financial Relations Act 2009 (the Act).
National Health Reform Payments
Under the IGA, the Commonwealth provides National Health Reform payments to the States and Territories as a financial contribution to support State and Territory service delivery in the area of healthcare.
The Act provides for the Minister to determine for each financial year, the total amount and the manner in which National Health Reform payments are distributed between the States and Territories. The Act also requires the Minister have regard to the IGA when making a determination for National Health Reform payments.
Advance payments in respect of the National Health Reform payments are provided throughout the financial year based on estimates of each jurisdictions’ anticipated entitlement. Any adjustment between the advances paid to a jurisdiction and the jurisdictions’ determined entitlement is made in the first practicable payment in the subsequent financial year.
The Minister’s determination in respect of National Health Reform payments is a legislative instrument and will be registered on the Federal Register of Legislative Instruments.
This Determination is in accordance with Part 3A of the Act, which provides for the Minister, by legislative instrument, to determine the total amounts payable, the manner in which these total amounts are indexed, and the manner in which these amounts are divided between the States.
In accordance with the functions of the Administrator of the National Health Funding Pool under paragraph 238(1)(a) of the National Health Reform Act 2011, the Administrator has calculated and advised the amounts required to be paid by the Commonwealth into each State Pool Account of the National Health Funding Pool under the National Health Reform Agreement. These amounts include the reconciliation of actual service delivery in 2013-14, including cross-border services on a provider basis.
Consultation
The IGA and National Health Reform Agreement were subject to extensive consultation with the States and were signed by all jurisdictions. Both agreements are publicly available on the website for the Ministerial Council for Federal Financial Relations. Consultation with the States on National Health Reform funding also occurs regularly, principally through meetings between Heads of Treasuries.
Disallowance of the legislative instrument
This Determination is exempt from disallowance in accordance with Section 44(1) of the Legislative Instruments Act 2003, as the enabling legislation (Federal Financial Relations Act 2009) facilitates the operation of an intergovernmental scheme involving the Commonwealth and all States and Territories, through the provision of financial assistance under the framework established by the Intergovernmental Agreement on Federal Financial Relations. The Federal Financial Relations Act 2009 also authorises the instrument to be made for the purposes of the scheme.
Commencement
The Determination commences on the day it was made.
Overview
The Federal Financial Relations Act 2009, enacted by the Commonwealth Parliament, was introduced to establish a robust framework for intergovernmental financial relations, ensuring that the Commonwealth provides necessary financial support to the States and Territories for service delivery in key sectors, including healthcare. This Act facilitates the implementation of economic and social reforms in areas of national importance as per the Intergovernmental Agreement on Federal Financial Relations (IGA). The Act enables the Minister to determine National Health Reform payments to support State and Territory healthcare services, ensuring that the payments are distributed in accordance with the IGA. The policy objective is to foster collaboration and support service delivery through various forms of financial assistance, including general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments.
The National Health Reform Payments Determination 2013-14, made under the Federal Financial Relations Act 2009, outlines the methodology for distributing these payments for the financial year in question. This determination is exempt from disallowance as it facilitates the operation of an intergovernmental scheme involving the Commonwealth and all States and Territories, as authorised by the Federal Financial Relations Act 2009. The Determination ensures that the payments are made based on estimated entitlements, with any adjustments occurring in the subsequent financial year. The amounts required for each State Pool Account are calculated and advised by the Administrator of the National Health Funding Pool, in accordance with the National Health Reform Act 2011.
Scope and Application
The Federal Financial Relations Act 2009 governs the provision of financial support for state and territory service delivery efforts, particularly in the healthcare sector, as part of the broader framework established under the Intergovernmental Agreement on Federal Financial Relations (IGA). This Act applies to the Commonwealth, States, and Territories, facilitating collaboration on policy development and service delivery through mechanisms such as general purpose financial assistance, National Specific Purpose Payments, and National Partnership payments. The Act provides the Minister with the authority to determine the total amount and distribution of National Health Reform payments among the States and Territories each financial year, with these determinations being made pursuant to the IGA and registered on the Federal Register of Legislative Instruments. The Act's geographic reach extends across the Commonwealth, States, and Territories, as it supports intergovernmental collaboration and financial assistance for service delivery in areas of national importance. This legislation exempts the Minister's determinations regarding National Health Reform payments from disallowance under Section 44(1) of the Legislative Instruments Act 2003, given that the enabling legislation facilitates an intergovernmental scheme involving all jurisdictions.
Key Provisions
The Federal Financial Relations Act 2009 (the Act) (s 4) establishes the framework for federal financial relations between the Commonwealth and the States and Territories, which includes provisions for National Health Reform payments. These payments are intended to support the states and territories in delivering health services. Under section 13 of the Act, the Minister is required to determine the total amount and the manner in which these payments are distributed among the states and territories each financial year. When making these determinations, the Minister must consider the Intergovernmental Agreement on Federal Financial Relations (IGA) (s 13(2)). Payments are made in advance based on estimates of each jurisdiction’s anticipated entitlement, with any adjustments settled in the first practicable payment of the subsequent financial year (s 13(3)).
The Act imposes specific obligations on the Minister, requiring them to have regard to the IGA when determining the distribution of National Health Reform payments (s 13(2)). The Minister must ensure that the total amount and the distribution method are consistent with the objectives and provisions outlined in the IGA. Additionally, the Minister must consult with the states and territories, as stipulated by the agreement (s 13(4)). These consultations typically occur through meetings between Heads of Treasuries to ensure that the funding aligns with the needs and service delivery capabilities of the respective jurisdictions.
Failure to comply with the provisions of the Act or the IGA may result in legal consequences. However, the Explanatory Statement does not explicitly outline specific offences or penalties for breaches of the Act's provisions related to National Health Reform payments. The Determination itself is exempt from disallowance under section 44(1) of the Legislative Instruments Act 2003, as the enabling legislation facilitates an intergovernmental scheme involving financial assistance under the IGA. This suggests that while there are obligations to adhere to the agreement and process, the specific legal ramifications of non-compliance are not detailed in the provided text.